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Cyclical hiring is the process of recruiting and hiring employees during periods when business or economic factors increase staffing needs. This staffing strategy allows companies to match recruiting and payroll expenditures with revenue during periods of business growth. Cyclical hiring can offer advantages to an employer; however, it can also pose disadvantages.

Cost Control

Cost control is a primary advantage of cyclical hiring. This practice allows companies to reduce recruiting, hiring and training expenses during slow economic periods. It also prevents payroll cost increases during periods of decreased revenue, allowing companies to control expenses to survive these periods. As revenues increase following an economic downturn, a company can use increased revenues to justify additional hiring and payroll costs.

Competition

Although cyclical hiring may allow a company to control hiring and payroll costs, a company may face a higher level of competition when hiring during periods of economic growth. Similar companies following a cyclical hiring strategy will likely offer similar opportunities to applicants during these periods. This may make it more difficult to find and attract talented employees to meet staffing needs.

Retention

Offers from competing companies may make it difficult to retain new hires during periods of economic growth. Other companies may have the funds available to offer your employees higher wages and more robust benefits packages, which can lure talent away from your company. Your company may retain employees by providing counteroffers involving wage increases or additional benefits; however, this increases your company's expenses and can reduce profitability.

Poor Employee Morale

A company that practices cyclical hiring may experience a reduction in employee morale. Employees who see increased hiring during economic growth periods may fear layoffs during a business or economic downturn. This can make employees less loyal to the company, and less enthusiastic about the prospect of training new hires. They may fear that new employees will replace them at the end of a growth period.

About the Author

Owen Pearson is a freelance writer who began writing professionally in 2001, focusing on nutritional and health topics. After selling abstract art online for five years, Pearson published a nonfiction book detailing the process of building a successful online art business. Pearson obtained a bachelor's degree in art from the University of Rio Grande in 1997.